Bitcoin perpetual futures open interest hits yearly high on Deribit

The open interest in bitcoin perpetual futures on the Deribit derivatives exchange has reached a yearly high of $740 million, a level not seen since November 2021 when bitcoin reached its all-time high of over $68,000.

An increase in open interest suggests that new money is entering the market, indicating growing participation and potential liquidity. 

CME bitcoin futures premium increases

Keyrock's Head of Business Development for APAC, Justin d'Anethan, suggested that the existing premium on CME bitcoin futures contracts is another indicator of increased institutional participation.

"One can't help but notice a healthy futures premium on CME contracts, hinting at some large sophisticated players wanting BTC exposure," d'Anethan told The Block.

The Keyrock executive's observation is supported by The Block's Data Dashboard, which shows an all-time high for CME bitcoin long open interest by asset managers. The Block's data shows there is nearly $2.2 billion in bitcoin long open interest held by asset managers.

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D'Anethan added that the current participation from sophisticated players "is probably bolstered by the fact that a decision on spot bitcoin ETFs should happen by mid/end January."

He added that this is putting pressure on investors who have not yet tried to front run the flow of capital that could come into the bitcoin market after an easier investment vehicle is offered.

However, d'Anethan gave a cautionary note, saying that crypto markets like to play games.

"When everyone is long, it's not inconceivable to imagine large players pushing prices lower, triggering leverage long liquidations on the down," he added.

Bitcoin was up 5.8% on Monday, trading for $41,875 at 3:47 p.m. ET.